Gold Breaks Through Support Levels as Traders Price In Nearly 70% Chance of a Fed Hike
Blue Line Futures' Phil Streible says a close below $4,350 would shift his gold outlook, while near-70% odds of a Fed rate hike are pressuring the metal.
Gold price fell to $4,330 a troy ounce after Tuesday trading session, breaching two support levels that Blue Line Futures chief market strategist Phil Streible had identified just a day earlier.
Streible said his outlook would shift on a daily close below $4,350, the point marking the erosion of August's breakout gains. He also flagged $4,378, tied to the August 18 low that followed Treasury Secretary Scott Bessent's unexpected move to expand the government's bond buyback program, as a critical threshold. A break below that level, he cautioned, would give bears more confidence to push toward $4,000.
After New York trading session today, spot gold indeed traded at $4,330 per troy ounce, down about 2.69% compared to a day before. Streible noted that he bases his calls on closing prices rather than intraday moves, meaning Tuesday's dip hadn't yet invalidated his thesis.
Heading into the session, Streible had maintained that the sharpest part of the selloff was likely finished, framing the pullback as a natural correction given gold's substantial run-up in the preceding weeks. The metal touched a record above $5,500 in late January, tumbled under $4,000 by late June, then climbed roughly 10% in August, though it remains down about 7% for the year overall.
Much of the pressure is originating outside the gold market itself. The 30-year Treasury yield hovered around 5.28% Tuesday, and has now closed above 5% on 55 separate days this year, the highest count since 2006. Meanwhile, Brent crude climbed past $94 a barrel after attacks on vessels transiting the Strait of Hormuz. Rising energy costs are amplifying inflation concerns, pushing the probability of a quarter-point rate hike at the Fed's September 15-16 meeting to nearly 70%, up sharply from roughly one-in-three odds before Chair Kevin Warsh's speech at Jackson Hole.
Related assets: Gold, Silver, Palladium, Platinum, Crude Oil, Brent Crude